IAM recently covered AT&T’s increased activity in the secondary patent market, with Lyft, Uber and Facebook among the companies that have purchased its assets. The telecoms giant has a significant portfolio – in terms of volume and quality – which has attracted a number of businesses looking to bolster their own holdings.

Occasionally, we hear people say, “brokered patents are all junk.” This begs the question, “are operating companies and non-practicing entities (NPEs) spending hundreds of millions of dollars buying junk patents?” Luckily, the short answer is no. We know clients have successfully bought and used brokered patents to substantially alter their licensing and litigation posture at a lower cost than the alternatives. We also know that patents on the brokered market rank higher than average patents (See “Finding the Best Patents — Forward Citation Analysis Still Wins”, by Oliver, et al.). So why this disconnect? We are victims of our own cognitive biases and the behavioral economic traps that make it harder for buyers to find and buy patents.

Tim Freestone explores why the growth in intellectual property and patent risks has not been matched by a corresponding growth in insurance. Tim interviews industry veterans including Kent Richardson on patent infringement insurance opportunities.

“Finding a Role for Insurance in a Technology-Driven Economy.” Freestone. InsuranceERM (July 2018), available here.

Yesterday the United States Supreme Court issued decisions in both Oil States v. Green Energy and SAS Institute v. Iancu. In Oil States the Supreme Court upheld the constitutionality of inter partes review (see here, here and here). In SAS Institute, a 5-4 majority ruled that there is no authorization in the statute for the Patent Trial and Appeal Board (PTAB) to partially institute a petition for inter partes review. Thus, the Supreme Court held that when the Patent Office institutes an inter partes review it must decide the patentability of all of the claims the petitioner has challenged.

To provide instant reaction to the Supreme Court’s decision in SAS Institute we’ve reached out to an All-Star panel of industry experts for their take on this important decision. Their analysis follows.

“SAS: When the Patent Office Institutes IPR It Must Decide Patentability of All Challenged Claims.” Quinn et. al. IPWatchdog (April 2018), available here.

Earlier today the United States Supreme Court issued its decision in Oil States v. Green Energy, finding that inter partes review is constitutional both under Article III and the Seventh Amendment to the United States Constitution. In a 7-2 decision, the Court determined that patents are a government franchise that are subject to review by the Patent Office even after granting, and can be revoked at any time.

10,000+ patents, spending $10M’s per year, cross-licenses, and license potential with dozens of companies, what’s the value of the portfolio to the business? Is your patent strategy valuable to your company? How? OK, tag you are it, what is the answer? The problem seems intractable. In previous articles, we have discussed how to determine your general patent risk and how to put a number on it. But where do you start when you are trying to estimate the value of your patent strategy?

Changes in how you watch movies, stream TV and use video chat are on the way. These will fundamentally affect the economics of how content is delivered to you, as well as the way that the patents underpinning the enabling technology are licensed.

The article from ROL looks at which patent owners have signed up as licensors to each pool, details how many patents they have on offer and royalty rates which are a combination of publicly available figures and, for Velos, the authors’ own estimates. The analysis pegs the handset royalty rate covered by the main pools at $1.60 which is increased to $2.25 when unaffiliated patent owners (which include Nokia and Microsoft) are included. As the article points out, that represents a royalty of 1.1% for a handset with an average sales price of $200. By way of comparison for 4G LTE technology the cumulative royalty per phone has been estimated to be $7.25.

We explore how you can model the expected cost and revenue of your ongoing cross-licensing negotiations to make it easier to prioritize your activities, and how doing that helps you run your cross-licensing program like a business.

In our sixth annual report on the secondary patent market, we find stabilization and even recovery. Years of negative results for patent holders have created a community feel that does not comport with the market data. Sales increased to just under $300M from $165M last year.

We surveyed 30 leading technology companies to discover how much many unseen patent assertions they face in a year. Unseen patent assertions are invitations to take a patent license where there is no litigation. We use the data to extrapolate the costs to these companies.

Our client’s executive team needed to better understand the investment and expected risk reduction return from their patent portfolio. We helped them build a financial model and direct their patent strategy using an approach where we identified and maximized patent value.

Why is patent value a better metric to use to set patent strategy? What sources of patent value can be identified for high technology companies? We review how patents are used and how they can be valued based upon their use.

The setting is familiar: a large corporate asserter uses its patents against a smaller, high-growth company with no patents. Companies like Qualcomm, IBM, Nokia, and Microsoft regularly assert their patents. This case study describes how one of our clients included patent buying into their patent strategy to successfully defended against a corporate assertion by acquiring patents in the open market.

Most high technology companies have a good grasp of the challenges and solutions for dealing with patent trolls. However, successful high technology startups face a threat beyond patent trolls: large corporate patent asserters looking to license their patents. These companies are not patent trolls by most definitions, and companies should adapt their approach to handling patent assertions from these kinds of companies. We explore how we worked with a successful startup client to handle such an assertion.

“Now a Big Company Wants You to Take a Patent License…” Richardson et. al. IPWatchdog (July 2017), available here.

Part five of the six-part IPWatchdog examination of the 2016 market has ROL Group looking into the risk for companies from patent assets on the market. We look into what types of packages are more likely to lead to litigation, and when in a patent’s lifetime are you more likely to expect trouble.

“Litigation and IPRs: More Dangerous Than You Thought?” Richardson et. al. IPWatchdog (April 2017), available here.

In the final installment of the six-part IPWatchdog series ROL Group examines the overall patent market. We explore the key metrics for any company interested in getting a strong sense of the patent climate for 2016.

FreshBooks does not generate LEDES format invoices. This makes it hard for lawyers and law firms to generate LEDES format invoices for client invoice management software such as Serengeti, CounselLink, TyMetrix, and others.

In this fourth installment in the six-part series of the 2016 market report from IPWatchdog, the ROL Group team helps shed light on the market trends that patent buyers and sellers should keep in mind when evaluating patents.

In this publication from IPWatchdog the ROL Group team takes a look at what patent buyers and sellers should expect from the current market. We offer comprehensive pricing analysis to determine whether your estimations for patents are in the ballpark.

2016 saw a significant rise in both the number of patent brokers and patent packages. Though the frequency of package sizes is similar to 2015, there is a remarkable increase in single-asset packages in 2016, and we continue to see a trend of the market favoring smaller packages due to their marketability. We explore this topic in Part 2 of our 6-Part series on our 2016 Patent Market Report.

While 2016 may have seemed like a tough year for the patent market – with dropping sales, decreasing prices, and the effects of Alice continuing to take its toll on fintech – there are also many new opportunities emerging. Our 2016 Patent Market Report shows that despite these setbacks, the patent market continues to be robust.

How do you respond to NPE threats and litigations, both anticipated and actual? One cost-effective strategy is the use of defensive aggregators. Here is our brief primer on using defensive aggregators and how they can stop patent trolls.

LinkedIn was a big brand name with a small patent portfolio – a combination that made it vulnerable to a patent attack. In 2012 the LinkedIn decided to do something about it. We work through the case study of how LinkedIn determined its vulnerabilities, set a patent development and patent buying program, and fundamentally changed its risk profile. We show how LinkedIn bought over 900 patents over four years.

In our continuing series of annual publications on the activity in the secondary patent market, we see that the only constant is change. Although asking prices have stabilized, sales are down, bringing the value of the market down to $165 million from $233 million last year. However, the launch of both IAM Market and the Industry Patent Purchase Program (IP3) has introduced new transaction opportunities. At the same time, the impact of negative patent decisions is becoming apparent as non-practicing entities (NPEs) pull back from the market. For the first time, purchases by corporations have exceeded NPE purchases. Even the biggest NPEs have been affected, with RPX succeeding Intellectual Ventures (IV) as the new buying leader. Further, the data shows that the US Supreme Court’s decision in Alice has crushed much of the nascent financial technology (fintech) patent market and affected software package sales rates. Finally, we received better litigation data this year, and it appears that the litigation risk from sold patents is much higher than previously reported – you may want to reconsider your risk models and membership of defensive aggregators.

After the Supreme Court’s Alice ruling, what new strategies do inventors need to obtain USPTO patent allowances? We examine how a new CardinalCommerce patent could lead the way forward. We make five recommendations for tech companies in post-Alice world.

What causes operating companies to sell their patents? Our intuition tells us that patent sales take place when the seller is in financial distress or the company is underperforming. We wanted to test whether the data aligned with our intuition.

With an ever-increasing client interest in international patents, we wanted to explore how patent ranking for EP patents has been conducted and how those ranking systems can be integrated to allow comparison and ranking with US patents. Here are our findings.

We followed up on our 2013 paper investigating Intellectual Venture’s patent portfolio to understand what, why and when IV bought, sold and litigated patents. By comparing Intellectual Venture’s 2013 assets with its 2016 assets, it is possible to draw conclusions about what you can do to help yourself should IV come knocking.

How much is Yahoo’s patent portfolio worth? Business Insider reports that it could generate up to $3B. We disagree, and we use data to show why. With an estimated street price of $772M (high of $1.15B, a low of $393M), Yahoo has a valuable asset, just not a $3B asset.

How do you find the highest quality patents reliably and efficiently? We share our methodology and have made the code and model available under a Creative Commons license. Here, we’ve identified five primary factors for consideration in patent ranking.

We’ve identified five primary factors for consideration in patent ranking. In this article, we’ll analyze how independent claim count, claim 1 word count, and family size & international filings can help to eliminate less useful patents quickly and efficiently.

Are you looking for a financial model to explain your patent development and acquisition programs? We show how to answer your CEO’s, or GC’s, question about how much to spend on patents? We present a method to tie your strategy to a firm business plan and calculate a return on your patent investment.

In many ways, the patent market is where the rubber meets the road in terms whether patents are valuable. It is the place where individual patents are assigned a price and also where companies often go for business solutions to patent challenges. We believe that shedding light on this market brings greater liquidity to patents as business assets, and brings all inventors and patent professionals more mindshare with business leaders. Here is our report on the brokered patent market in 2015.

“The 2015 Brokered Patent Market: A Good Year to Be a Buyer.” Richardson et. al. IPWatchdog (February 2016), available here.

Asking prices are down, but the patent brokerage business is not in as poor health as it may first appear – especially for a select handful of players. Here, we share our analysis of the brokered patent market in 2015.

Every year, we carefully track the brokered patent packages for sale on the open market and provide insights into the comprehensive state of the market and how it is changing. 2014 has seen prices drop and the deal flow slow down but what does it mean for the future of the market? Continue reading for our detailed report on the brokered patent market in 2014.

IAM Magazine
Targeting the revenues of other companies according to the patent assertion risk they present effectively defines your patent development and external acquisition strategies. We show how to build a financial model to determine where you spend your patent development and buying dollars and then how to calculate and ROI.

IAM MagazineIn December 2013 Intellectual Ventures (IV) took a step towards transparency by publicly listing about 33,000 of its patent assets, representing 82% of its patent monetization portfolio. Analyzing IV’s portfolio has now become a tractable problem. Here are some of the questions we answered: what does IV buy, what characteristics does IV look for in a patent, what does IV do after the purchases, and who did IV buy from.

While the brokered patent market in the United States is going strong, there is still little analysis of this business. Our review of 222 deals offers insight into what is becoming a lucrative market. Here, we present our analysis of the brokered patent market in 2013.

Although sales of brokered patent packages reach an estimated $153 million a year, lack of data makes this a tricky market to evaluate. We attempt to illuminate this information void with our review of 186 patent packages consisting of a total of 5,394 issued US patents and 7,595 total patent assets worldwide. Here is our detailed report on the 2013 brokered patent market.

What are patent aggregators? What do they do? How do they differ? We take a detailed look at the rise of patent aggregators and how this rise has affected the industry.

“The Rise of the Patent Aggregators, Appendix B of Edison in the Boardroom: How Leading Companies Realize Value From Their Intellectual Property.” Richardson et. al. Wiley (November 2011), available here.

You can sell your patents for a cash infusion. If you have a patent portfolio, you may want to consider selling your patents to meet your cash needs. We analyze the steps to selling your patents, including developing the sales package and finding the right price.

We interviewed leading IP executives across the high tech industry as well as clients, colleagues and even competitors to provide you with valuable insights into the future of the patent market. Our conclusion: there has never been a better time to acquire high-quality patents at low prices.